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The Cabinet Committee on Economic Affairs (CCEA) has announced that it has sanctioned Rs 8,580 crore scheme under which companies owned by the Central Government will install 12,000 MW of solar power plants over the subsequent four years using indigenously manufactured solar modules.

This is to present a boost to local solar module manufacturing industry which has been indolent ever since India lost its case at the World Trade Organisation (WTO) over compulsory local procurement for certain solar power projects.

With this, the Government has made good a promise it had made as a suggestion via a December 2017 ‘concept note’ of the Ministry of New and Renewable Energy (MNRE).

“The 12,000 MW or more capacity of grid connected solar power projects will be set up by the Government Producers in 4 years period, i.e. 2019-20 to 2022-23, as per the terms and conditions specified in Government Producer Scheme,” stated a statement issued on by the Centre .

“The Scheme will consent use of both solar photovoltaic cells and modules manufactured locally as per specifications and testing requirements fixed by MNRE,” the statement said

The scheme is anticipated to stimulate investments of Rs 48,000 crore and create around 200,000 jobs. This scheme is on the lines expected.

Now, with the CCEA approving the Rs 8,580 crore viability gap funding for government-owned companies putting up solar plants with local modules, the domestic manufacturers will get some support.

On this development, Sunil Rathi, Director, Waaree Energies said "We are elated with CCEA's inclination towards boosting domestic module and cell manufacturing in the country, by allocating 12 GW of PV projects exclusively to domestic players. The move is expected to have a dampening short term and a positive long term impact on the industry. While on the face of it, the proposal is set to provide relief to solar domestic manufacturers for the next four years, even with immediate implementation, the on-ground reality indicates a gestation period of at least a year, till this proposal actually yields operational benefits. The move fails to provide the much needed immediate support to the sector, due to which, mid scale players may not be able to sustain the pressures for the next year."

"On the up side, this proposal is bound to attract foreign investment in the long run. We foresee players from China and Malaysia setting up manufacturing hubs in India, thus furthering the 'Make in India' initiative. Moreover, while there are ample module manufacturers in the country to meet the Government demands, the proposal would provide impetus to existing and new players to venture into cell production, thus creating job opportunities and enhancing the GDP contribution in the long run", he added.